Question: What does this information suggest if Waterways cost structure is the same for the company as a whole? The section of Waterways that produces controllers
What does this information suggest if Waterways cost structure is the same for the company as a whole?
The section of Waterways that produces controllers for the company provided the following information.
| Sales for month of February | 4,000 | |
| Variable manufacturing cost per unit | $9.75 | |
| Sales price per unit | $42.50 | |
| Fixed manufacturing overhead cost (per month for controllers) | $81,000 | |
| Variable selling and administrative expenses per unit | $3.00 | |
| Fixed selling and administrative expenses (per month for controllers) | $13,122 |
| Contribution Margin Ratio | 70 | % | |
| Degree of Operating Leverage | 4.78 | ||
| Break-even Point in Dollars | $134,460 | ||
| Margin of Safety Ratio | 20.9 | % |
What does this information suggest if Waterways cost structure is the same for the company as a whole?
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